Author: Bargavi S, Student at SASTRA Deemed to be University, Thanjavur.
ABSTRACT
One of the debatable and controversial moves of the union would be the introduction of the Finance Act. Every year new amendments and provisions were added through the Finance Act to fit the dynamic changes. One such and most debatable provision of the Finance Act 2022 was the introduction of Section 194R to deduct tax at source for the benefits or perquisites by the provider himself. The CBDT, by using its power, supplemented the new Section with circulars to remove difficulties. But the issues and ambiguities around the section and circulars are yet to be resolved completely. The lack of proper definitions, lack of guidelines for valuation leads to absurdity. Further, the exemption of the non-resident from the provision paves the way for more controversies. This new provision is opined by the experts as a revival of the old FBT. Throughout this article, the author has explained the basics of Section 194R and the issues in the provision and circulars issued by the CBDT. It is the legislature’s duty to clear the ambiguities in the provision by providing additional rules for its implementation; otherwise, the aim of curbing tax evasion through 194R would only be a mirage.
